PHOENIX – The Hobbs administration has taken decisive action to prevent illegal development in Rio Verde Foothills, a community east of Scottsdale, where a real estate developer was found to be bypassing Arizona’s water security and consumer protection laws. This week, the Arizona Department of Real Estate (ADRE) issued and recorded a Cease & Desist Order, stopping a developer from continuing with a project that lacked an assured water supply.
The developer had failed to secure a required subdivision public report, which is a legal requirement for developments in Active Management Areas (AMA). Such reports include obtaining a certificate of assured water supply or a written commitment from a designated water provider, ensuring that developments have access to a reliable 100-year water supply.
“Today I am glad to report the Arizona Department of Real Estate has taken swift action to prevent what it believes is a blatant evasion of consumer protection and water security laws,” said Governor Katie Hobbs. “Rio Verde Foothills has suffered enough from developers cutting corners, and this action is a necessary step in protecting the community.”
The Cease & Desist Order prevents the final sale of homes in the development until the developer complies with Arizona’s laws regarding water supply and subdivision reporting. The case has been a focus for Governor Hobbs, who has pledged to crack down on “wildcat development” that exploits loopholes and jeopardizes both water security and consumer rights in Arizona.
Governor Hobbs has made it clear that current laws need to be strengthened to close loopholes that developers use to bypass Arizona’s strict water requirements. “While we can take action in this case, our laws still fall short of offering true solutions that protect consumers,” Hobbs said, urging the need for legislative reform.
The investigation and enforcement actions were carried out in collaboration with the Arizona Attorney General’s Office, underscoring the state’s coordinated effort to protect residents from unscrupulous development practices. Attorney General Kris Mayes reaffirmed her commitment to consumer protection: “My office remains firmly committed to holding accountable those who violate state law and put Arizonans at risk, especially in areas like Rio Verde Foothills where water is limited.”
ADRE Commissioner Susan Nicolson also highlighted the importance of protecting buyers, noting that transparency regarding water availability is a critical part of Arizona’s real estate laws: “When subdivision public report requirements are not followed, buyers are exposed to an unacceptable risk.”
The action follows Governor Hobbs’ signing of Senate Bill 1432 in 2023, which addressed water supply issues in Rio Verde Foothills and continues her administration’s focus on finding long-term solutions to Arizona’s water challenges. However, loopholes in the state’s development laws remain, leaving communities vulnerable to unregulated and potentially harmful development practices.
For now, the Hobbs administration’s Cease & Desist order ensures that no further development will proceed in Rio Verde Foothills without a proven, reliable water supply, safeguarding both consumers and Arizona’s precious water resources.
